Almost no one likes to sleep on a day bed - they just aren't very comfortable - so all you end up gaining is extra, unused floor space.

What would you do and what is the best option here? 

Before diving too deep into property searches, it's wise to first determine your financing options.

Most lenders will offer two options:1: 20% down and 20 yr amortization and 10 yr term.2. 25% down and 25 yr amortization and 10 year term.Rates will vary by region, lender, and relationship with your lender.  

Take a look at the find a lender tab or work with a broker who can quote you multiple options from a wide variety of lenders! 

After all that extra time with your parents coming back around the holidays and giving yourself strong footing to have a comfortable life is worth considering. 

You'll want to pay market rents and bank the extra.   

However, this comes with the caveat that you and your husband are prepared to cover any potential increases in mortgage payments after the renewal, especially if the new rate is significantly higher than the current 3.5%, which I ignore since I am not versed in the mortgage system in Canada (although it does sound a bit like an adjustable rate mortgage from what you described).Before making a decision, I recommend speaking with a financial advisor or a mortgage broker to explore your refinancing options and get a sense of what rates you might be looking at come June.

What are my options and potential workarounds?

You could even offer a lease option for when they're back on their feet... get creative and generous!